Israel Samuels LLP - Israel Samuels LLP

Guest Author: Jeff Gustafik, Financial Advisor With Umanzio & Gustafik of Wells Fargo Advisors

July 27, 2015 By Israel Samuels LLP Leave a Comment

Operating a business can be extremely taxing and require business owners to be schooled in numerous areas that he or she is not necessarily an expert. That’s why consulting with good legal counsel such as Israel & Samuels LLP before a legal issue arises is extremely prudent.

The same can be said about planning for the future. As a business owner, having a retirement plan is one area that can be complicated yet vital to the longevity of the business and owner(s). As regulatory requirements increase it has never been more important for business owners to ensure that their company retirement plan is in compliance.

Umanzi & Gustafik Financial Strategies Group with Wells Fargo Advisors specialize in assisting business owners in the design and management of company sponsored retirement plans such as 401(k) and Profit Sharing. These services include employee education, asset management, and ongoing reporting and communication to ensure business owners are meeting their fiduciary responsibilities.

Business owners also deserve comprehensive investment planning but are often too busy to make time. This is why we work closely with business owners to take on the responsibility to develop and implement written investment plans customized to their unique set of circumstances. These plans address such issues as retirement, tax matters, risk minimization, business sales, and succession planning.

We can be a wonderful resource for business owners and entrepreneurs. For more information and a complimentary consultation you may contact Jeff Gustafik, at (925) 472-5200 or jeff.gustafik@wfadvisors.com.

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.

Asset Protection Strategies

July 23, 2015 By Israel Samuels LLP Leave a Comment

What happens if you are sued, and lose, and the judgment amount is large enough to be really painful, and not covered by insurance? Perhaps it could even force you into personal bankruptcy. Or severely damage your business’s ability to continue in operation.

The complexities and complications associated with this topic present challenges even for experienced practitioners who can advise you, including your attorney, accountant and insurance agent. But before you pick up the phone to schedule an appointment,
some preliminary assessments might be in order.

What kind of risks do you face, both personally and for your business? The type of risks, some estimate of the maximum payments you might be subject to, and the coverage aspects of your business insurance are among the factors you should consider.
How likely is it that you could be exposed to liability? If your business does not engage in dangerous or risky activities that could significantly affect the type and amount of insurance that you need. Businesses with exactly the same annual sales and number of employees might have significantly different liability-exposure profiles depending on the products or services they provide.
What are the assets you need to protect? Where are they physically located? Who owns them (that is, you personally, or your incorporated business)?
Talk with some of your friends and business associates who own small businesses in roughly the same size range as yours.

Accumulating that kind of information before you schedule appointment with an advisor can yield big dividends in minimizing your costs to obtain the advice you need.

Finally, remember this: if you wait until you’ve been sued in order to design and maintain a good asset protection plan can be a serious mistake, and very damaging to your business. Whatever protective measures you undertake at that time will most likely be labeled as a “fraudulent transfer” and will provide little or no real protection. “An ounce of prevention is worth a pound of cure.”

New Emeryville Sick Leave And Minimum Wage Ordinance

July 20, 2015 By Israel Samuels LLP Leave a Comment

The San Francisco Bay Area municipality of Emeryville has passed a new sick leave and minimum wage ordinance that took effect July 1, 2015. Under the Ordinance, the minimum wage in Emeryville will increase to $12.25 per hour for small businesses (employers with 55 or fewer employees) and $14.44 for large businesses (employers with 56 or more employees). The law also provides that any employee who performs at least two hours of work in a given week in Emeryville will be entitled to paid sick
leave accrued at the rate of 1 hour of paid sick leave for every 30 hours worked, although employers may cap the amount of sick time that can be accrued annually; for small businesses accrual of paid sick time may be capped at 48 hours per year. For large businesses it may be capped at 72 hours per year. Employees have the right to use all sick time accrued per year and carry over all accrued and unused sick time subject to the annual cap.

The law also broadens the definition of “Family Member” for requesting sick leave. Under the ordinance “Family Members” include a “designated person” if the employee is without a spouse or registered domestic partner. “Family Members” also include providing care for guide dogs, signal dogs, or service dogs of the employee or employee’s family member.

Emeryville joins San Francisco, Oakland and other cities across the nation that have enacted paid sick leave ordinances. These ordinances provide greater employee protections than State law. If you have employees in a locality with a minimum wage and/or sick leave ordinance it is essential to discuss with your legal counsel changes to employment agreements, manuals and procedures to avoid potential employee claims. Don’t get in trouble for not providing a sick day to your employee who needs to stay home to take care of “Sparky.”

Courts Can Now Permit Children To Visit Ailing Parents

July 13, 2015 By Israel Samuels LLP Leave a Comment

Governor Brown has signed Assembly Bill AB 1085 that gives Courts the authority to order a conservator — someone who acts on behalf of an ailing adult — the power to enforce the adult’s rights to receive visitors, phone calls and personal mail. In the past, judges did not have explicit authority to enforce visitation rights of an ailing adult, except with respect to spouses.

The Assembly bill was introduced after the three adult children of Casey Kasem, the well-known Los Angeles-based disc jockey and radio personality, claimed they were blocked from seeing their father by his wife of 30 years. Kasem was diagnosed with Parkinson’s disease and a form of dementia, and died in 2014.

The law also requires caretakers to notify certain individuals of the ailing adult’s death.

When family disputes arise as to access to an ailing family member, they now can reliably enlist the Court’s help. However, it is prudent to do so through legal counsel since a conservator still has discretion to prevent access when he or she deems it necessary to do so.

Caution Advised In Implementation Of Employee Drug Testing Programs

July 9, 2015 By Israel Samuels LLP Leave a Comment

Two employees subjected to “on-demand” random drug testing by their employer sued their employer and have been awarded damages for intentional infliction of emotional distress. In Aro v. Legal Recovery Law Offices, Inc., the California Fourth District Court of Appeals upheld the verdict.

Prior to the drug test, the employees had received a revised 2011 employee manual that stated that the employer reserved the right to test employees for the use of illegal drugs or alcohol where an employee’s job carries a risk of injury or accident, or after an accident or probable cause. When the Plaintiffs (employees) were provided the revised handbook containing the drug test policy by e-mail they asked what changes were made to the handbook. The employer merely advised that they should read it
and “figure it out” themselves.

In October 2011, the two Plaintiffs were unexpectedly required, along with all other employees, to take a drug test in a public bathroom. Both Plaintiffs resisted consenting to the drug test and were advised that the employer would “figure out what to do” with them later, and that they would be suspended and sent home in the interim.

The Plaintiffs finally agreed to the urine test. During the test, someone watched them in the bathroom. One of the Plaintiffs later complained to the employer he felt compelled to consent to the test due to “intimidation,” and did not feel comfortable
being watched. There was no evidence that the two Plaintiffs were individually suspected of drug use.

The Plaintiffs sued for breach of the contractually implied covenant of good faith and fair dealing and for intentional infliction of emotional distress, among other claims. After a bench trial, the trial judge awarded the Plaintiffs approximately $15,000 each for noneconomic damages. The employer appealed and the Court of Appeal affirmed the trial court’s ruling.

Furthermore, the Court determined that the Workers’ Compensation rules in California do not prevent Plaintiffs from recovering monetary damages for emotional distress since the random drug test administered in this case the Court found violated the Plaintiffs’ fundamental right to privacy, which is protected by the California Constitution, and therefore exceeded the risks and expectations inherent in the employment relationship.

The Court of Appeal also concluded that the employer’s conduct was sufficiently extreme and outrageous to constitute intentional infliction of emotional distress based on the lack of notice of a random drug test to the employees, and no individualized suspicion of drug use by the two Plaintiffs. The Plaintiffs were told to sign a consent form in front of other employees, and were threatened with suspension when they resisted. There was also evidence that indicated Plaintiffs were subjected to the random drug test only after they complained to the employer about unpaid overtime.

Although the Aro case was ordered not to be published and, therefore, cannot be cited as precedent in other cases it is clear California courts will weigh employees’ privacy interests with the employer’s business necessity for conducting random drug tests and such testing will continue to face heightened scrutiny. We recommend that employers review their drug test policies and consult with legal counsel on how they are to be implemented to ensure compliance with the hazy world of state and local requirements for random drug testing.

Expect To Pay More Salary Or Overtime

July 6, 2015 By Israel Samuels LLP Leave a Comment

On June 30, 2015, the Department of Labor issued proposed new regulations under the Fair Labor Standards Act (FLSA.) The proposed regulations raise the salary level for exempt employment, from the $455 per week or $23,660 annually set in 2004, to $970 a week or $50,440 a year by 2016.

Executive, administrative, learned professionals and some computer employees (white collar exemptions), who make less than $970 a week will no longer be exempt and will be entitled to overtime for all hours they work over 40 in a given work week. Employers will have to decide either to pay these employees overtime going forward or raise their salary level to more than $970 a week in order to comply with the three part test set forth in the proposed FLSA regulations.

The three part test requires that an employee be (1) paid on a salary basis, and (2) at a salary level now of not less than $970 a week and (3) that they meet the duties test set forth for each of the white-collar exemptions. The proposed regulations would establish a mechanism for automatically updating the salary and compensation levels going forward each year to ensure that they will continue to provide a useful and effective test for exemption.

The rulemaking period offers a prolonged period for comments and revisions so employers should not expect that these revised regulations to take effect until late 2015 or early 2016. We will keep our readers advised as to any updates on these regulations. Stay tuned!

Guest Author – Hank Sullivan of Strategic Solutions: Leadership

June 29, 2015 By Israel Samuels LLP Leave a Comment

Strategic Solutions is a business that analyzes small businesses and entrepreneurs in an effort to help them become more efficient and grow their business. We believe that this is great resource for our readers.

What is Leadership?
Leadership can be personal leadership or leading others. But it always starts with knowing yourself. Phil Jackson (Famous Basketball coach and leader) stated in his book Sacred Hoops,

“Leadership means treating everyone with the same care and respect you give yourself and trying to understand their reality without judgment. When we can do that, we begin to see that we all share basic human struggles, desires and dreams.”
Everyone should try each day to be a better person and leader. This can be done by simply paying attention to other’s needs or by taking steps to improve through reading and education.”

Written by Hank Sullivan, President of Strategic Solutions a business leadership and personal development company. Additional information can be found at www.stratsolutions.net

New Employment Laws in 2015

June 22, 2015 By Israel Samuels LLP Leave a Comment

New employment laws take effect in California in 2015. Here’s a handy list of the most significant new laws that you should be aware of as an employer that have or will take effect in 2015.

Many California employers will be required to provide Paid Sick Leave starting July 1, 2015.
California Labor Code § 2810.3 will require businesses to automatically share liability with a “labor contractor,” such as a temporary staffing agency, if the agency fails to pay wages or provide workers’ compensation insurance to its employees who are assigned to work at the business.
The Fair Employment and Housing Act has expanded the definition of “national origin” to include the circumstances under which someone got their driver’s license (i.e. if they got a type of license provided to undocumented workers).
AB 1443 extends the protections under the FEHA to interns.
AB 2503 requires that mandatory sexual harassment training include information on bullying.
AB 2617 prohibits mandatory arbitration agreements from including claims for violations of certain civil code sections dealing with violence or threats of violence based on sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, sexual orientation or political affiliation. It seems to us to be a clear violation of the Federal Arbitration Act, but California courts and legislatures have been fighting that battle for years.
AB 326 Sometimes technology advances more quickly than legislation. Employers must report workplace deaths or serious illnesses or injuries to Cal OSHA immediately. That’s not changing. But where the old law says the reports must be made by telephone or telegraph, the new law says by telephone or e-mail. Who knew that the job outlook for telegraph operators could get any bleaker?
New minimum wages in San Francisco ($11.05 effective January 1, 2015), Oakland ($12.25 effective March 2, 2015), San Jose ($10.30 effective January 1, 2015), San Diego ($9.75 effective January 1, 2015), and hotels within the City of Los Angeles ($15.37 effective July 1, 2015 or July 1, 2016, depending on the number of hotel rooms).
The minimum pay for exempt computer professionals increases to $41.27 per hour, $7,165.12 per month, or $85,981.40 per year.

Here are steps employers can take to better protect themselves:

Make sure personnel policies and handbooks are up to date;
Train managers to understand that certain issues, such as requests to accommodate a disability, leave requests, deciding who’s exempt from overtime requirements, etc., should be escalated to someone with specialized knowledge;
Check with your Labor attorney to discuss these changes and how it effects the operation of your business.

If It Happens In California, It Stays In California

June 18, 2015 By Israel Samuels LLP Leave a Comment

Forum selection clauses in contracts are always a hot topic. The California Court of Appeals in the recent case of Verdugo v. Alliant Group, L.P. held forum selection clauses in employment agreements that choose forums in which to litigate that in any way diminish the substantive rights afforded employees under California law are invalid since California statutory employee rights cannot be waived.

The Court offered a work-around. If the foreign forum provides the same or greater rights than California, or the foreign forum will apply California law on the claims at issue, then the matter may be tried in a forum outside of California.

The substance of your employment agreements should not remain static. It is prudent to have your legal counsel review your employment agreements on, at least, an annual basis.

Don’t Ask Employment Applicants These Questions

June 11, 2015 By Israel Samuels LLP Leave a Comment

California and Federal Law protect certain personal information of prospective employees for disclosure and make it illegal for employers to even ask for the information. Here are just a few prohibited questions:

“How Old Are You?”
Employers have the legal right to make sure a prospective employee is old enough to work for them, but other than that, cannot directly ask for the prospective employee’s age or indirectly ask questions that reveal the employment applicants’ age, such as “how long have you been working?” or “when did you graduate high school?”

“Have You Ever Been Arrested?”
Employers are allowed to ask if an applicant has ever been convicted of a crime. However, employers cannot ask the applicant if he or she has ever been arrested in general.

“How Is Your Health?”
It is illegal for employers to ask prospective employees if they are in good health, how tall they are, how much they weigh, if they have had any past illness or operations, or how many sick days they took at their last job. However, employers can ask about specific physical abilities related to tasks the applicant would be required to perform.

It’s also illegal for employers to directly ask if an applicant has any disabilities as such a question is prohibited by the Americans with Disabilities Act (ADA). An employer may ask if an applicant can perform the basic functions of the position without accommodation.

“Are You Married?”
Anything that fishes for information about a candidate’s family plans (marriage, engagement, and child planning) is technically illegal because it falls under pregnancy discrimination.

“What Is Your Religion?”
The religion an applicant practices, the holidays they observe, and anything related to those things, is personal information applicants never have to disclose.

“What Is Your Nationality?”
An employer can check whether an applicant can legally work for them, but cannot ask questions regarding the applicant’s race or place of birth, whether they are a U.S. citizen, or whether English is their native language. Employers, however, can ask what languages the prospective employee reads, speaks, or writes fluently.

“Do You Like to Drink Socially?”
The FDA categorizes alcoholism as a disability. Therefore, employers should not ask about alcohol, or even tobacco use, by a prospective employee.

“Have You Ever Used Drugs In the Past?”
An employer cannot ask about a candidate’s past use of illegal or prescription drugs. However, employers can ask whether the candidate is currently using any illegal drugs, but, why ask? It is better to establish a drug-free workplace that requires random drug testing and a mandatory drug test before the candidate is hired. Then, an employer will not run afoul of the law and will not have to rely on a self-serving statement of the candidate to determine whether the candidate is presently using illegal substances.

As always, it is recommended that you check with your Labor attorney before asking any questions of a future employee that may be a violation of his/her right to privacy.